Warning: Savings Rate Change

In recent research showing that there is a demand for warnings regarding savings rate changes, it was found many individuals are tired of the interest rate fluctuations that are decreasing the overall earnings potential. Nationwide Building Society is demanding that consumers should be told when the introductory interest rates are going to expire in order to save the consumers from finding out years later. The average savings rates are following below inflation for many of the savings accounts, yet the consumers are not warned of this.

Many of the banks and building societies are offering a high initial rate for interest on savings accounts to gain more consumers. Typically these rates are going to last for a year, but then they drop below the Bank of England’s base rate, stripping consumers of their ability to gain more in savings. Nationwide is called for a warning system of all banks and building societies to allow their consumers warning regarding the falling rates when the accounts are coming to the end of the term. Most consumers are forgetting about the change, and don’t realize that it will decrease with such significance. Nationwide believes that all consumers should be aware of the dip in the rates and that better deals should be available to them.

Matthew Carter is the director of Nationwide, and in a statement said that the savings market is competitive and that the providers are trying to get their own market share. However, some providers are more interested in getting those profits on the books and fail to achieve a long term good value for consumers. The consumers are important to making any business profitable; therefore when the rates are cut drastically and the consumers are becoming angry the margins are going to fall. This means the businesses need to start thinking more about those they serve over the projected profits.

Currently consumers are told when their mortgage deals are going to change or the deals are going to end. Matthew Carter believes that the same courtesy is warranted with the savings account deals offered. Since the deals are becoming more common place in the market it may be harder for a saver to find the best options and make the better decisions, if a warning system is not put in place.

Lisa Taylor is a personal finance individual with moneyfacts.co.uk. She studies information regarding the market trends. She too, agrees that something must change. In fact she has been advising consumers to think about accounts with steady rates of interest rather than jumping between the different deals that are offered. It may not be simple to find the accounts with no strings attached, but they will offer a better or equally good return without the time consuming hoops. It is important in a fast changing market to prepare to move funds on a regular basis if you are not in a consistently good account.

This means that the consumers should be looking for something that will provide the best there is rather than being caught in the cuts. In December there were more interest rate cuts, meaning that the savings are being reduced by about .25% from the base rate. This means for those who are struggling over the Christmas season and the purchases from that time, it will be more difficult to gain savings.

Back To Financial News January 2008

Purchasing with Credit Cards
Traps with Credit Cards
Understanding Credit Scoring
What Is A Credit Reference Agency
Testing Your Debt
10 Ways To Save Money
Benefits of Savings
How To Save of Invest Your Money
Individual Savings Accounts
Sainsbury’s Bank Internet Savings Account
Product Types For Savings
Saving with Child Trust Funds
Savings and Investments Advice
Trouble Ahead with Free Banking
Warning: Savings Rate Change